South Stream construction starts in Serbia on Nov. 24

BELGRADE Works on the part of the South Stream pipeline that will run through Serbia will begin November 24, it was announced in Belgrade on Monday. The announcement came after a meeting between Prime Minister Ivica Dacic and Gazprom CEO Alexey Miller. South Stream construction starts in Serbia on Nov. 24 One year after construction works n the pipeline started in the Russian town of Anapa, South Stream will also be built in Serbia. During the meeting today, Dacic said that the South Stream gas pipeline was one of the most valuable investments in our country in recent decades. "With the construction of South Stream, Serbia remains consistent in implementing the Energy Agreement it signed with Russia. It is in the interest of both Serbia and Russia to implement this agreement, and it is important for Serbia because it will make our country a regional energy hub," he said. The works will cost EUR 1.7bn, and a significant part will be done by local companies. The possibility that a branch of this pipeline could go to Macedonia, and another to the Serb Republic (RS) was also discussed today, while it is planned that one branch would transport gas to Kosovo - "which would ensure regional stability in gas supply," said reports. During the next days "all the technical details and parameters for the start of the South Stream gas pipeline works" will be determined, it has been announced. Dacic said earlier today that it was "very important to begin the construction of South Stream," saying that it was a big project, whose value, counting only the building costs, was "a little under two billion euros." "The key question is the beginning of the construction of South Stream," Dacic said today during central state ceremony marking Armistice Day. Beside his meeting with Dacic, Alexei Miller also met separately with President Tomislav Nikolic and the first Deputy Prime Minister Aleksandar Vucic. Vucic and Miller "emphasized the importance of signing the agreement on the financing and construction of the South Stream pipeline, as well as of agreements between Serbia and Gazprom on gas transport." The meeting also considered the possibility of repayment of old debts, and it was concluded that by the end of the year "ways must be found to close them." Alexey Belogorev of the Institute for Energy Strategy commented on these developments to say that he believed it was "realistic that work on South Stream in Serbia will start by the end of this year." However, significant construction works should not be expected before next year. "The real construction will occur when there is financing. And it will, in all likelihood, be the same as in Bulgaria - you will get a long-term loan on 20, 30 years, and the money would be repaid from the transit of gas," he explained. "Therefore, the talks are now focusing on the terms of the loan, and what part of the transit will go to repay the loan that will probably be under more favorable conditions - possibly the same as with Bulgaria, with an interest rate of 4.25 percent per year," Belogorev said. "Communication problems" between the Serbian and Russian sides will not, in the opinion of Russian experts, bring into question the deal between Moscow and Belgrade. "Geopolitical concerns and energy security are beyond the important issue of economic cost-effectiveness. But there is no turning back because everything went pretty far, so the project will not be abandoned - it will certainly be realized. Whether they like it or not, they must take the real economic situation of the countries in the Balkans into account, and meet practically everyone half-way," Belogorev was quoted as saying. Meanwhile, the Serbian side has said that a feasibility and land expropriation project has been completed. Alexey Miller (L), Ivica Dacic meet in Belgrade on Monday (Beta) B92 Tanjug

South Stream construction starts in Serbia on Nov. 24

One year after construction works n the pipeline started in the Russian town of Anapa, South Stream will also be built in Serbia.

During the meeting today, Dačić said that the South Stream gas pipeline was one of the most valuable investments in our country in recent decades.

"With the construction of South Stream, Serbia remains consistent in implementing the Energy Agreement it signed with Russia. It is in the interest of both Serbia and Russia to implement this agreement, and it is important for Serbia because it will make our country a regional energy hub," he said.

The works will cost EUR 1.7bn, and a significant part will be done by local companies.

The possibility that a branch of this pipeline could go to Macedonia, and another to the Serb Republic (RS) was also discussed today, while it is planned that one branch would transport gas to Kosovo - "which would ensure regional stability in gas supply," said reports.

During the next days "all the technical details and parameters for the start of the South Stream gas pipeline works" will be determined, it has been announced.

Dačić said earlier today that it was "very important to begin the construction of South Stream," saying that it was a big project, whose value, counting only the building costs, was "a little under two billion euros."

"The key question is the beginning of the construction of South Stream," Dačić said today during central state ceremony marking Armistice Day.

Beside his meeting with Dačić, Alexei Miller also met separately with President Tomislav Nikolić and the first Deputy Prime Minister Aleksandar Vučić.

Vučić and Miller "emphasized the importance of signing the agreement on the financing and construction of the South Stream pipeline, as well as of agreements between Serbia and Gazprom on gas transport."

The meeting also considered the possibility of repayment of old debts, and it was concluded that by the end of the year "ways must be found to close them."

Alexey Belogorev of the Institute for Energy Strategy commented on these developments to say that he believed it was "realistic that work on South Stream in Serbia will start by the end of this year."

However, significant construction works should not be expected before next year.

"The real construction will occur when there is financing. And it will, in all likelihood, be the same as in Bulgaria - you will get a long-term loan on 20, 30 years, and the money would be repaid from the transit of gas," he explained.

"Therefore, the talks are now focusing on the terms of the loan, and what part of the transit will go to repay the loan that will probably be under more favorable conditions - possibly the same as with Bulgaria, with an interest rate of 4.25 percent per year," Belogorev said.

"Communication problems" between the Serbian and Russian sides will not, in the opinion of Russian experts, bring into question the deal between Moscow and Belgrade.

"Geopolitical concerns and energy security are beyond the important issue of economic cost-effectiveness. But there is no turning back because everything went pretty far, so the project will not be abandoned - it will certainly be realized. Whether they like it or not, they must take the real economic situation of the countries in the Balkans into account, and meet practically everyone half-way," Belogorev was quoted as saying.

Meanwhile, the Serbian side has said that a feasibility and land expropriation project has been completed.